Rhabdomyosarcoma (RMS) is the most frequent soft-tissue sarcoma in children. Embryonal rhabdomyosarcoma (E-RMS) represents the most common RMS subtype, but the molecular events driving this tumor are still largely unknown. The hedgehog (HH) pathway, a major signal transduction cascade, is linked with many cancers, including RMS. As we previously have detected loss of heterozygosity of PTCH1 in E-RMS, we now examined 8 E-RMS tumor samples and 5 E-RMS cell lines for the presence of PTCH1 mutations, but none was detected. However, in the E-RMS cell lines, a variable pattern of up-regulated expression of certain HH signaling target genes, including HHIP, PTCH1, SFRP1, and GLI1, was observed. Moreover, treatment with the small molecule HH signaling inhibitors cyclopamine and GANT61 inhibited cell proliferation in all E-RMS cell lines analyzed. Interestingly, GANT61 was more effective, and this was accompanied by increased apoptosis, while cyclopamine promoted necrotic events. Specific knockdown of SMO had no effect on the proliferation of E-RMS cells, indicating the presence of an SMO-independent HH signaling pathway in the E-RMS cell lines. Furthermore, in an in vivo xenograft model, tumor growth was significantly reduced by GANT61 treatment of E-RMS cells. Additionally, siRNA experiments provided evidence that inhibition of GLI1 or GLI3 but not GLI2 was sufficient to reduce proliferation of these cell lines. As GANT61 is known to block GLI1/GLI2 transcriptional activity, the inhibition of E-RMS growth by GANT61 is likely to be mediated through GLI1. In conclusion, our findings implicate that GLI1 could constitute an effective therapeutic target in pediatric E-RMS.